LeEco agrees to new sourcing norms, files fresh application to open own stores

KOLKATA: Chinese smartphone maker LeEco, which is splurging money on advertisements in India, has filed a revised application to the Foreign Investment Promotion Board (FIPB) to set up its company-owned stores in India agreeing to the recent changes in sourcing norms.

LeEco thus becomes the first consumer electronics major to agree to revised norms, with Apple yet to take a final call though CEO Tim Cook on Wednesday said the company is keen. Xiaomi, which had earlier sought exemption from local sourcing norms, has told the government it does not need a waiver any more since it is already manufacturing in India.

LeEco is hopeful of receiving FIPB approval in a month and plans to open 5-10 flagship stores by December with its complete range and also convert the current online store Lemall.com run by a partner into a company-owned entity, said LeEco India chief operating officer, smart electronics business, Atul Jain.

The company will eventually be able to agree to the sourcing norms since it plans to soon start local manufacturing in India with a partner, said Jain.

"We have made a revised application to FIPB seeking exemption from local sourcing under the cutting-edge and state-of-the-art technology domain. We have already given details about our technology prowess and hope to receive the approval soon," said Jain.

Under the older rules, local sourcing was waived for companies selling products with cutting-edge and state-of-the-art technology. However, new norms announced last month allows only a three-year exemption. After that, 30 per cent of the average value of goods purchased over the next five years will have to be procured locally and subsequently this level of local sourcing will have to be met annually.

LeEco also wants to set up 500 brand stores in India through franchisee route, which will sell the entire range of smartphones, soon-to-be launched televisions, headphones, virtual reality headsets and memberships for its content library. It has just started selling through offline retail with four distributors on board and south Indian retail chains Sangeetha Mobiles and Poorvika Mobiles.

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